Utah Sues Kalshi, Declares Online Gambling ‘Public Nuisance’

Utah attorney general Derek Brown slammed online gambling as a “public nuisance” while announcing legal action against prediction market giant, Kalshi.

It’s the latest legal tussle between Kalshi and one of the most anti-gambling states in the U.S. Utah, along with Hawaii, has some of the most restrictive gambling policies in the country.

There are no casinos, sports betting is illegal, and the state has no lottery. However, prediction markets flourish under the protection of the federal Commodity Exchange Act (CEA).

AG: Utah ‘Bans Any Game of Chance’

The key argument of the attorney-general’s lawsuit is that prediction markets amount to illegal gambling.

“Kalshi told Americans it was legal in all 50 states,” the Utah AG began, adding that the state’s constitution bans “any game of chance”.

“Moments ago, the state of Utah filed suit in the third district court against Kalshi. [Kalshi] has run a sportsbook in Utah since at least 2024.”

Under Utah law, the AG argued, Kalshi is causing a “significant and ongoing harm to a [significant] number of Utahns.”

All Event Contracts on the Table

The Utah government isn’t just targeting Kalshi’s sports event contracts, either. The AG cited sports, culture, politics, and mention markets among the categories he wants banned.

He is also asking the court to enforce geofencing on Kalshi to keep its platform out of Utah. Plus, Kalshi would be forced to pay “restitutions” to customers. However, the AG didn’t specify an overall figure to recompense Utah’s estimated 32,000 prediction market traders.

“Kalshi bet that Utah wouldn’t use its gambling laws,” the AG finished by saying. “Kalshi lost that bet.”

Utah vs Kalshi: A Timeline

• February 2026: Kalshi sues Utah to prevent the application of state gambling laws
• August 2026: A Kalshi lawsuit against Utah Kalshi appeals to the Tenth Circuit Court of Appeals.
• October 2026: Despite the win for Utah, Kalshi continues operating. Utah AG announces legal action.

Utah’s Kalshi War Moves into Next Phase

As in other states like New Jersey, state officials have been fighting battles against prediction markets for offering “unlicensed sports betting”.

Where some states are protecting their own online gambling legislation, Utah is fighting to protect its no-gambling stance.

Utah tried to impose its anti-gambling law on Kalshi before the prediction market sued the state in February. However, Kalshi lost that case in August which has led Utah to pursue the complaint it has now made.

Kalshi responded with what has become something of a stock answer across its many, growing legal battles. It argued that Kalshi was a “federally regulated financial exchange” overseen by the CFTC. “No single state should have a veto over it,” it added.

Kalshi Warns of Predictions Exodus

Kalshi could yet be saved by the U.S. Supreme Court if and when it rules over who should oversee prediction markets.

The prediction market has experienced both wins and losses in the district courts, which ultimately could lead to a federal decision.

Kalshi CEO Tarek Mansour last week issued a warning on the future of prediction exchanges if states get to regulate the markets. Despite saying he felt good about prediction markets’ legal future, he said that exchanges could “go offshore” if federal regulation is dumped.